Steppe Cement Share Discussion Threads

[wilo101] 11/10/2017 00:41

The shares are, in reality, worth at least GBP2.50 per share

[wilo101] 05/10/2017 22:17

No the Company has its own free cash and will not borrow to retire and repay the Bond the credit lines are purely for the seasonal financing as is best to produce all year round and sell as the prices peak from May to October

[jailbird] 05/10/2017 21:45

WiloThanks for your reply . I can see the debt info is also in the results recently .Excuse my ignorance but just trying to understand The 10% bond will be redeemed from cash resources ? Do you mean cash available from other loan facilty ?Because that would just been borrowing to pay of the bond?Even so that will bring the debt nearer to $17mI hope the Co can further continue to pay down the debt over the year, particularly as the Co is sounding more optimistic over the next quarters for this year.

[azalea] 05/10/2017 14:55

This sounds increasingly like a sleeping tiger; when analyst report on the Prelims in May 2018; ordinary investors could see the start of its awakening with a roar and puts some money where its mouth is!!! The share price is very sensitive to even modest buying activity

[wilo101] 05/10/2017 14:35

Before then, as the 1.45 billion Kazakh Tenge 10% bond will be fully redeemed in November 2017 and the company already has the cash on deposit enabling it to do so, therefore debt will be reduced this year by a further US$4.3m, and 10% per annum interest will stop accruing.

The 1st-ever dividend was in September 2005, just before the IPO, the second was in 2014, and from 2017 onwards there should be increasingly generous annual dividends, as the thing becomes a cash-cow.

[azalea] 05/10/2017 14:17

WILO
I congratulate you for having such a very good grasp of the company's financial situation. In 2021, there should be a dramatic improvement in any outstanding debt, as the cement wagons start earning a net profit.

[wilo101] 05/10/2017 13:50

The debt position of the Group was once US$95m, and through through 4-major shareholder underwritten and guaranteed rights issues, as well as using our own cash flow has been reduced and now only comprises as of 30 June 2017, the following, of which the Bond will be fully repaid in November, and a dividend declared:

• A JSC Halyk Bank (the largest in the market) loan of USD4 million at 6% p.a. interest, which is cheap in their market, due in 2018.

• A long-term US$9 million loan outstanding to Halyk Bank for the purchase of the 350 cement hoppers/railway wagons, as the company has its own fleet, repayable monthly until November 2021 at 6.5% p.a. and secured only with a pledge over such wagons.

• A 1.45 billion Kazakh Tenge 10% bond which will be fully redeemed in November 2017.

• A loan of KZT1.688 million with Halyk Bank JSC subsidised by the government for capital investment at 6%.

• CAC/Karcement, being the in-country company's which own and operate the assets have maintained KZT4.9 billion of available working capital lines from Halyk Bank, Altyn Bank and VTB Bank. The current rates are 6% p.a. in USD and 12% p.a. in KZT. As of 30 June 2017 they have the equivalent of USD7 million outstanding from these working capital loans, but by the end of August 2017 they were all repaid.

As of 31 August 2017, total bank debt net of cash amounts to US$20 million of which 65% is denominated in US$ and the balance in KZT

A new loan of 580 million KZT was signed in July 2017 in order to fund a new packing plant to be installed near the 2 dry lines.

The loan carries a 6% interest in KZT and is repayable in 7 years with one-year grace. The loan will be drawn down in the period through August 2018.

So the situation is now very good, and will be much better by November, the Group has plenty of cash and undrawn facilities.

[hari] 05/10/2017 08:33

I wonder if you guys can elaborate on the Cos debt arrangements Are there any concerns on servicing these ?Reading through interims again , could se an interesting improvement ahead quarter by quarterAppreciate replies from Wilo and Mattjos

[azalea] 05/10/2017 08:23

wilo101

Thank you for the info on KZT Bonds. I fully concur with your statement on being taken out by one of the big boys; KAZ position on the silk road between China and the Middle East, where billions of dollars are being poured in to createa modern trade route of standardised railways and roads through countries on route between the two; will in the medium term be hugely beneficial to the likes of STCM.

[wilo101] 05/10/2017 07:29

The KZT Bonds listed on the KASE will be entirely retired and repaid from cash in November, further reducing the debts, plus an interim dividend declared and paid.

One day such as Cemex, HolcimLafarge, CRCH and CRH plc will buy for US$500m, it is only a question of time.

[azalea] 20/9/2017 08:49

I believe the next two quarters could result in a further notable improvement in STCM bottom line.

[wilo101] 20/9/2017 08:03

GDP of Kazakhstan has grown to 4.3 percent in the first eight months of 2017
after an economic slowdown in July, the Vice Minister of the National Economy
said. International trade is up by almost a third, while inflation has slowed down and now fluctuates within the target range of 6-8 percent.Industrial segment is the fastest growing sector in the Kazakhstani economy; it has shown a strong 8.5 percent growth due to mining and quarrying
results of 11.3 and 6.1 percent, respectively. This increase is a six year high for Kazakh industry. Meanwhile, agriculture the fastest growing sector of 2
016 is only up 1.9 percent in January-August 2017. Moreover, fixed investments have increased by 3.4 percent to more than KZT4.8tn. Three of the fastest growing
segments of investments are trade (up 9 percent), transport (up 5.9 percent),
and industry (up 5.1 percent).

[wilo101] 19/9/2017 09:35

STCM is worth at least US$500m, in a reasonable market, and much more in a good market, in 2007 it had a market capitalization of more than GBP3.30 per share when there were only 115m shares in issue and only the 4 wet-lines in production, and the dry-lines were under reconstruction. Azmi placed out half his shares at GBP3.30, and since has bought all back, and now owns even more, he has several listed companies such as Pure Circle, STCM itself and Rohas Technic and so is finally actively back in the markets and listed stock game, see for example hxxp://www.theedgemarkets.com/article/wan-azmi-back-game and KLSE:ROHAS and purecircle.com

If any major wants to enter the market, such as Cemex, CRG, LafargeHolcim, or a Chinese major such as CCCH they have to bid and buy STCM.

Air Astana, the national airline, backed by BAE Systems has appointed JP Morgan and UBS to get it a premium listing in London next year, Kazatomprom has similarly mandated Credit Suisse, and Ferro Alloy Resources, now listed on KASE, and the owner and operator of the world's largest vanadium mine/ore-body will also list in London this year, so with all of this, as well as resumed and returned GDP growth as well as the World Cup in Russia next year, the entire Region, not just Kazakhstan will be finally entirely re-rated, even Tajikistan has just managed to do a Eurobond and so has even Ukraine, despite the on-going issues in their East.....so finally the region has turned and is on the up, especially given the commodity prices and like all commodity countries....

[azalea] 19/9/2017 08:10

Matjos
WCC, those were the days, one of my top winners ever. IF STCM can reach a quarter of those dizzy heights, I shall be hugely pleased. If the asset numbers are anything like what is claimed along with its replaceable value,then the share price is truly cheap as chips. With 79.97% of shares in major holders hands, further buying could give the share price momentum. The management has spent millions of dollars converting to two dry lines, making them hugely efficient and cost effective. That said, I believe key to the company's future depends on what Mr Amzi Wan Hamzah, intends to do with his 29.1% stake.

[mattjos] 18/9/2017 22:40

thankfully a 50k seller late in the day :-) ... this desperately needs a seller to create some liquidity as virtually nothing available at these levels all day.
MM's will to want sell them on higher but, i'll take what's offered up to 35p on current financial metrics ... £1 coins for 50p at present.
nice quiet thread with just a couple of well informed posters & most PI's given up here many years ago. Reminds me of West China Cement in many ways.

[wilo101] 18/9/2017 13:55

Vicat and Heidelberg each paid Euros350m, for just single 1mtpa dry-lines, and STCM has double-that, and 4 wet lines and is in he best location.

[mattjos] 18/9/2017 12:49

I'd agree wilo101 .. it's a unique company & opportunity.

Just trying to present the most conservative of valuations.

The historical investment on the dry line and the rolling stock puts this head & shoulders above anything else in Kazakhstan & far more capable of riding out the bad times and coming back very, very strongly during the better times.
Very sensibly management are concentrating on the higher margin sales now

[wilo101] 18/9/2017 12:39

Actually, more than 60% is and has always been in the hands of the 4 original founders/developers, so what they say and do is key.

The company is the largest and lowest costs producer in Kazakhstan, and the only independently listed cement plant in the entire FSU.

The true value is nothing short of US$500m. The plant, mines, quarries and assets, equipment and infrastructure would cost more than US$1bn to build today.

[mattjos] 18/9/2017 12:11

219,000,000 Shares in Issue
175,162,493 Tied up with 3%+ long term holders
Therefore, theoretical 'Free' float of 43.84m shares

219,000,000 * £0.16 = £35m mkt cap. That's US$47m mkt cap at the Bid price

Total Assets from the Interims is US$101m

[azalea] 18/9/2017 11:54

Just goes to show what a modest amount of buying we are seeing this morning, can do to the sp,albeit, if for no other reason, on the back of the promising Interim report. The biggest attractions for me has always been Mr Amzi Wan Hamzah's, 29.1% stake, which he has been building these past several years, at twice the current price. I believe that he will either bid for the company, or sell to another company in the business, but not necessarily one based in KAZ.

[mattjos] 18/9/2017 11:21

good post wilo101 ... Well I have appreciated what the company are achieving and so too at least one other person.
This is valued at least 50% below where it should be just now

[wilo101] 18/9/2017 11:10

The US$10m, KZT denominated CAC Bond, listed on the KASE will be fully retired from available cash in November, thus further reducing debt, materially, the Bonds as listed can be found at hxxp://www.kase.kz/en/emitters/show/CACM.

The stock is massively under-valued and under-rated, and the market does not appreciate and gives the company no credit for what it is doing, and has achieved.

[mattjos] 18/9/2017 10:37

this is far too cheap given the underlying business valuation & its performance recently

[mattjos] 18/9/2017 10:27

have continued to add this am

[azalea] 18/9/2017 10:15

Tick tock. Up 13% this early morning.